Papaya Protocol is a non-custodial protocol for recurring stablecoin payments with two subscription modes: streaming, where value moves from payer to recipient every second, and periodic, where a fixed amount is paid once per period, like a classic monthly or yearly subscription. This glossary explains what a recurring stablecoin payment is and the terms you will meet when using one.
Short answer
A recurring stablecoin payment is a payment in a dollar-pegged token, such as USDC or USDT, that the payer authorizes once and that then repeats or continues automatically until cancelled. It can take two forms: a stream that moves value every second, or a periodic subscription that pays a fixed amount once per period, such as monthly.
Why recurring payments in stablecoins exist
Stablecoins made one-off onchain payments common, but most of the economy runs on recurring payments: software, memberships, media, utilities and, increasingly, AI services. Self-custody wallets have no autopay button, because every transfer needs the owner's signature. Recurring payment protocols fill that gap: the payer authorizes once, and payments follow the agreed terms.
The two forms
Payment streaming
In streaming mode, a subscription has a rate: an amount per second. Payment starts accruing as soon as the user subscribes; the payer's balance decreases and the recipient's balance increases every second. Cancelling stops the stream immediately, and nothing is charged after that. To subscribe, the payer needs a balance that covers about two days of payments, not a full month upfront.
Periodic subscription
In periodic mode, a subscription has a fixed amount per period, for example 10 USDC per month: the format finance teams and card subscriptions already use. Each periodic contract has a fixed period length, such as monthly. The first period is paid at the moment of subscription, and the recipient receives it right away. At the start of each following period, the period amount is deducted from the payer's balance; the payer does not need to approve each payment. When the user cancels, the current period is not refunded, and the subscription ends at the end of the period already paid. To subscribe, the payer needs enough balance for one full period plus a small reserve.
| Question | Streaming | Periodic |
|---|---|---|
| What is charged | An amount per second | A fixed amount per period, such as monthly |
| First payment | Starts accruing immediately | Full first period paid at subscription |
| Cancellation | Stops immediately | Current period is not refunded; ends when the paid period ends |
| Balance needed to start | About two days of payments | One full period plus a small reserve |
| Typical use | Usage-based pricing, AI agents, pay-as-you-go access | Classic monthly or yearly plans, memberships, content |
| Networks and tokens | Same supported networks and stablecoins | Same supported networks and stablecoins |
Glossary
| Term | Meaning |
|---|---|
| Payer | The person, company or AI agent that pays |
| Author | The merchant, creator or service that receives the payment |
| Project | The platform a subscription belongs to; each project has an ID and an admin |
| Balance | Stablecoins the payer deposited into the protocol; it can be withdrawn at any time |
| Rate | In streaming, the amount paid per second |
| Period amount | In periodic mode, the fixed amount paid once per period |
| Deposit for | Funding someone else's balance, for example an app funding its user |
| Spending permission | The payer's authorization for a subscription; it can be revoked at any time |
| Allowance | An ERC-20 permission that lets a contract pull tokens from a wallet up to a limit |
| Refill | Topping up a low balance automatically from the payer's wallet allowance |
| Liquidation | What happens when a balance cannot cover its subscriptions and refill is not possible |
| Project fee | A share of each subscription that a project can take, set by the project admin |
Liquidation in plain words
A subscription runs only while the payer's balance can cover it. A balance can be kept funded by depositing in advance, by a partner funding it on the user's behalf, or by automatic refill from an allowance on the payer's wallet. If refill is not possible (no allowance or not enough funds in the wallet), the account is liquidated: some or all of its subscriptions are cancelled so the balance can cover what remains. The caller receives a reward of about $0.01 to cover gas, and the rest of the balance stays with the user. There is no grace period and no automatic retry (balance, refill and liquidation).
Who controls the money
The payer grants a spending permission and can revoke it at any time. Papaya Finance Limited never takes custody of user funds. Balances sit in a non-custodial, non-upgradeable smart contract. Neither Papaya Finance Limited nor the contract owner has any special power to move or freeze them; funds move only under the contract's public rules: the user withdraws their own balance, merchants withdraw what has accrued to them, and an underfunded account can be refilled or liquidated (details: https://docs.papaya.finance/overview/balance-refill-and-liquidation).
Where recurring stablecoin payments are used
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SaaS and AI tools billed monthly (periodic) or by usage (streaming).
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Creator memberships and communities.
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APIs, compute and data billed by time.
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AI agents paying for services within a funded budget.
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Wallets and fintech apps offering subscriptions as a feature.
Papaya Protocol's streaming and periodic modes run on the same supported EVM chains and stablecoins: Ethereum, BNB Chain, Polygon, Base, Scroll, Sei, Avalanche, Arbitrum, zkSync, and Arc. Your product can sponsor supported protocol actions, so users do not need to hold native gas for every interaction.
Further reading
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Docs: how it works, subscription modes
About Papaya Finance Limited
Papaya Protocol is built by Papaya Finance Limited (Hong Kong) and is unrelated to the payroll company Papaya Global.
FAQ
What is a recurring stablecoin payment in one sentence?
A stablecoin payment that the payer authorizes once and that repeats or continues automatically until they cancel.
Is payment streaming a recurring payment?
Yes. It is a continuous form of recurring payment: value moves every second instead of once per period.
What is a periodic subscription?
A recurring payment of a fixed amount once per period, such as monthly, like a classic subscription.
Which stablecoins can be used?
Commonly USDC and USDT, depending on the network.
Can the payer stop a recurring stablecoin payment?
Yes. The payer can cancel at any time. Streams stop immediately; periodic subscriptions end at the end of the period already paid.
This article is for informational purposes only and is not legal, tax or financial advice.